Yelp Inc. YELP shares gained 1% during Thursday’s extended trading session after the company reported better-than-expected first-quarter 2025 results. The company’s first-quarter earnings jumped 80% to 36 cents per share, beating the Zacks Consensus Estimate by 16.1%. The robust bottom-line performance was mainly driven by higher revenues and lower expenses.

Yelp’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 53.1%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Yelp’s revenues increased 8% year over year to $359 million and surpassed the consensus mark by 1.8%. The year-over-year increase was driven primarily by growth in advertising revenues from Services businesses.

Yelp Inc. Price, Consensus and EPS Surprise

Yelp Inc. price-consensus-eps-surprise-chart | Yelp Inc. Quote

Yelp’s Q1 in Detail

Yelp’s advertising revenues (95.2% of total revenues) increased 8% year over year to $342 million, primarily driven by an increase in revenues from Yelp ad products and, to some extent, the addition of revenues from the RepairPal Network. The increase in Yelp ad product revenues was mainly driven by the year-over-year growth in average CPC, partially offset by a decrease in ad clicks. Our model estimate for Advertising revenues was pegged at $336 million.

Advertising revenues from the Services business grew 14% year over year to $232 million, driven mainly by strong demand from advertisers and a rise in paying advertising locations. The RR&O division decreased 3% year over year to $110 million. This decline in the segment was due to persistent macroeconomic headwinds that have further challenged restaurant and retail businesses, reducing demand for Yelp’s services in the RR&O category. Other revenues increased 9% to $17 million.

Our model estimates for Services, RR&O and Other revenues were pegged at $216.5 million, $119.6 million and $15.7 million, respectively. Total Paying Advertising Locations decreased 3% year over year to 517,000. Per our model, Paying Advertising Locations were pegged at 524,000.

Total costs and expenses increased 2% year over year to $322 million. Yelp’s first-quarter adjusted EBITDA climbed 32% year over year to $85 million. The adjusted EBITDA margin increased to 24% in the first quarter from 19% in the year-ago quarter.

Yelp’s Balance Sheet & Cash Flow

As of March 31, 2025, Yelp’s cash, cash equivalents and short-term marketable securities were $324 million without any debt.

The company generated an operating cash flow of $98 million and a free cash flow of $87.5 million in the first quarter.

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Yelp’s FY25 & Q2 Guidance

Yelp updated its guidance for full-year 2025. The company now anticipates revenues between $1.465 billion and $1.485 billion, instead of the previous range of $1.470-$1.485 billion. The adjusted EBITDA is now expected in the range of $345-$365 million as against $345-$360 million projected previously. The Zacks Consensus Estimate for full-year 2025 revenues is pegged at $1.47 billion.

The company also initiated guidance for the second quarter. For the second quarter of 2025, Yelp anticipates revenues between $362 million and $367 million. Adjusted EBITDA is projected in the band of $84-$89 million. The Zacks Consensus Estimate for second-quarter revenues is pegged at $352 million.

Yelp’s Zacks Rank and Stocks to Consider

Currently, Yelp carries a Zacks Rank #3 (Hold).

Impinj PI, StoneCo STNE and Broadcom AVGO are some top-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. While Impinj and StoneCo each sports a Zacks Rank #1 (Strong Buy) at present, Broadcom carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Impinj’s 2025 earnings has been revised upward by 21 cents to $1.68 per share over the past 30 days, and suggests a year-over-year decrease of 20.4%. Impinj shares have plunged 39% over the past year.

The Zacks Consensus Estimate for StoneCo’s 2025 earnings has moved upward by 12 cents to $1.38 per share in the past 30 days, reflecting 2.2% year-over-year growth. StoneCo shares have plunged 16.8% in the trailing 12 months.

The Zacks Consensus Estimate for Broadcom’s fiscal 2025 earnings has been revised upward by 4 cents to $6.60 per share in the past 60 days, suggesting an increase of 35.5% from fiscal 2024’s reported figure. Broadcom shares have rallied 55.9% over the past year.

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